At Small Biotech Firm, Revival Was Also Personal Quest For Owner

By Neal St. Anthony
Star Tribune (Minneapolis)

WWR Article Summary (tl;dr) Great story about the rocky road to success for business owner Sally Hed. Persistence and discipline have paid off for this boss who at one point was close to filing for personal bankruptcy.


Sally Hed recently became the sole owner of ImmunoChemistry Technologies, a 10-employee company outside Minneapolis that makes biotechnology tools that, since 1994, have helped researchers at places like the National Institutes of Health and the World Health Organization find remedies for a host of maladies and diseases.

“We sell ‘red and green stuff’ that makes their tests better,” said Hed, referring to a line of substances that help researchers determine the effect of various treatments on human cells. “It really makes a difference.

“Using our ‘reagent’ to monitor the effectiveness of treatment (enables cancer) patients to try a different drug right away, rather than waiting longer and suffering through painful side effects,” Hed said. “It’s one more way new diagnostic technology can personalize medicine specific for each patient.”

After years of struggle and near bankruptcy that were averted only when ImmunoChemistry earned its first major patent and sold it in 2014 plus royalties, the company is cash-flowing on about $3 million in revenue.

Hed, 46, who holds degrees in genetics and cell biology from the University of Minnesota, joined the fledgling company in 1996 from a job as a lab analyst at a larger company. She wanted to become a shareholder in a small growth company.

It’s been a sometimes volatile run. Including several tough years over the last decade that meant no salary at times for the owners and cost Hed her sailboat, luxury apartment and a boyfriend she’d rather forget.

She and the company averted financial collapse with a several-year sacrifice plan that eventually stabilized Immuno.

And now the future looks pretty good.

“Her leadership and business plan gave us the confidence that the future would be bright,” said Mick Burkard, a business banker with U.S. Bank who helped craft a U.S. Small Business Administration-guaranteed loan this year that enabled Hed to acquire the shares of her retiring co-owner, Brian Lee, a research doctor and founder. “Sally is fun to do business with because of her candid nature. She also has such a passion for the company and the employees. That makes her a great partner.

“They have a patented niche for manufacturing products that further important research. And it’s a cool thing to help a company that’s doing good.”

A decade ago, ImmunoChemistry was struggling. Patents were forever pending but not granted. Expenses were high, revenue low.

A 2012 lawsuit by a former partner involving the patent that was sold in 2014 consumed a lot of revenue before the matter was settled two years ago.

Hed and the other owner sometimes went without paychecks.

Hed, who also holds an MBA, also functioned as Immuno’s business manager. And a decade ago, she took a hard look at her own finances, just as she had to scrutinize Immuno spending.

She was living in “a huge” apartment, owned a nice sailboat and a “fancy Saab convertible,” Hed recalled. There were probably too many vacations. She was $100,000 in debt and had an unpaid income tax bill of $40,000.

Like Immuno, Hed needed an austerity plan.

“I didn’t declare (personal) bankruptcy because if I did, as an owner, I’d have to sell my assets, including my interest in the company, and my partners would have to declare bankruptcy, too,” Hed recalled. “And the company would have been done.”

Hed swallowed her pride, tore up credit cards, and went to FamilyMeans, a nonprofit consumer credit counseling service that helped her devise a plan to pay off her debts in full within five years.

“I sold everything I could,” she recalled. “I moved out of my … apartment and into (one) … with high school friends for $225 a month. I took odd jobs. When my Saab died, I replaced it with a dilapidated Honda … that didn’t have a radio. I wasn’t very much fun to be around. My boyfriend split. Who could blame him? But I was not going bankrupt.”

ImmunoChemistry, which also makes low-cost products that improve tests for pregnancy, HIV and other conditions, cleared a major hurdle when it sold the major patent and resolved related litigation with the former part-owner. A major share of the proceeds was consumed by the litigation, which ended in a mediated settlement.

Meanwhile the company was turning a profit with revenue that was growing 10 percent-plus annually.

Hed, since 2014 half owner with Lee and his wife, decided she wanted to buy out the couple when Lee decided to retire.

Hed said it was personally risky for her to borrow the undisclosed sum to buy out Lee, 62, who remains a company consultant.

But it was worth it. She likes making a buck from good products devoted to cures and relieving pain and distress. She enjoys her small management team of several young women.

Life is good. Hed has a more empathetic boyfriend, owns a residence and a boat. But she’s living within her means.

“It’s a simple beginner boat with a yellow plastic hull and a bright blue sail,” she said of the purchase through Craigslist for $550. “It’s perfect.”

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